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Existing literature has taken a predominantly positive view of identity as a potential source of power for institutional challengers who seek to transform the status quo, and has largely ignored the extent to which identity can also be a source of vulnerability. Institutional challengers leverage their collective identities to persuade various audiences to support change, but because communication is a process of co-constructed meaning, their identities are subject to interpretation and threat by outside audiences. In this paper, we combine the literatures on institutional change and identity threat to develop a model for how audiences’ interpretations of and responses to institutional challengers’ communication might threaten institutional challengers’ identities, and under certain conditions, reduce the likelihood of successful change. We distinguish three threats to the identity of institutional challengers: a rejection threat, an indistinctiveness threat and a dilution threat. We suggest that the implications of these identity threats for the likelihood of successful change depend on the phase of the change process: theorization or diffusion; and on two characteristics of audiences: their heterogeneity and their mutual visibility.